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A new rumor has surfaced that Wal-Mart will begin selling 4GB iPhones for only $99 later this month as part of their agreement to begin selling touchscreen handsets.

Apple's existing iPhone 3G offers of course include the 8GB and 16GB models, which sell for $199 and $299, respectively, and come with two-year contracts. Last year there was a 4GB first-generation iPhone briefly available that sold for $399 but it was discontinued only a couple of months later and when Apple decided to focus on boosting the 8GB sales.

The BoyGeniusReport has reported rumors that Apple may introduce a 4GB iPhone 3G and would allow Wal-Mart to sell it for $99 with a two-year contract. The BoyGeniusReport cites an internal memo, "that Wal-Mart has reached agreement with Apple to offer iPhone 3G in Wal-Mart and Wal-Mart-managed Sam’s Club Connection Centers nationwide beginning December 28, 2008."

Wall Street is also expecting Apple to be one of many smart phone producers to discount their products to sell some of their excess inventory over the holidays.
Needham & Co. analyst Charles Wolf argues that Apple's “strong real-world revenues and its high iPhone gross margins” give the company a definite advantage to market a $99 iPhone which could lead to substantial gains for the smart phone.

These Wal-Mart rumors follow rumors of Costco supposedly getting ready to sell an 8GB iPhone for only $149. Personally I hope both rumors are true, and if they are I will be going for the 8GB at Costco…However, I don’t see why they’d start selling a 4GB at Wal-Mart on Dec. 28th, 3 days after Christmas?